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Recommendation: The Secretary of the Navy should develop a comprehensive plan for shipyard capital investment that establishes (1) the desired goal for the shipyards' condition and capabilities; (2) an estimate of the full costs to implement the plan, addressing all relevant requirements, external risk factors, and associated planning costs; and (3) metrics for assessing progress toward meeting the goal that include measuring the effectiveness of capital investments. (Recommendation 1)

Agency: Department of Defense: Department of the NavyStatus: OpenPriority recommendation

Comments: The Navy concurred with this recommendation and said it would take steps to develop and implement a comprehensive plan. When we confirm what actions the Navy has taken in response to this recommendation, we will provide updated information.

Recommendation: The Secretary of the Navy should conduct regular management reviews that include all relevant stakeholders to oversee implementation of the plan, review metrics, assess the progress made toward the goal, and make adjustments, as necessary, to ensure that the goal is attained. (Recommendation 2)

Agency: Department of Defense: Department of the NavyStatus: OpenPriority recommendation

Comments: The Navy concurred with this recommendation and said it would take steps to conduct regular management reviews. When we confirm what actions the Navy has taken in response to this recommendation, we will provide updated information.

Recommendation: The Secretary of the Navy should provide regular reporting to key decision makers and Congress on the progress the shipyards are making to meet the goal of the comprehensive plan, along with any challenges that hinder that progress, such as cost. This may include reporting on progress to reduce their facilities restoration and modernization backlogs, improve the condition and configuration of the shipyards, and recapitalize capital equipment. (Recommendation 3)

Agency: Department of Defense: Department of the NavyStatus: OpenPriority recommendation

Comments: The Navy concurred with this recommendation and said it would take steps to provide regular reporting to key decision makers and Congress. When we confirm what actions the Navy has taken in response to this recommendation, we will provide updated information.

Recommendation: To ensure that the United States has adequate available sealift capacity, the Secretary of Defense should direct the Secretary of the Navy to finalize a comprehensive long-term sealift recapitalization plan that incorporates leading practices for capital planning, such as conducting a needs assessment, providing a framework with established criteria to assess options, specifying how projects will be prioritized, ensuring strategic linkage to DOD sealift requirements, and developing a long-term capital plan.

Agency: Department of DefenseStatus: Open

Comments: The Navy concurred with this recommendation and said it would take steps to implement it. When we confirm what actions the Navy has taken in response to this recommendation, we will provide updated information.

Recommendation: To ensure that the Navy is prepared to provide Navy combatants with required fuel and other supplies at sea, the Secretary of Defense should direct the Secretary of the Navy to conduct a timely assessment of the effects of widely distributed operations on the size and composition of the combat logistics force and modify force structure plans accordingly.

Agency: Department of DefenseStatus: Open

Comments: The Navy concurred with this recommendation and said it would take steps to implement it. When we confirm what actions the Navy has taken in response to this recommendation, we will provide updated information.

Recommendation: To improve DOD's management of its prepositioned stocks and reduce potential duplication among the services' programs, the Secretary of Defense should direct the Under Secretary of Defense for Acquisition, Technology, and Logistics, in coordination with the Chairman of the Joint Chiefs of Staff, to revise DOD's strategic policy or include in other department-wide guidance a description of the department's vision and the desired end state for its prepositioned stock programs.

Agency: Department of DefenseStatus: Open

Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.

Recommendation: To improve DOD's management of its prepositioned stocks and reduce potential duplication among the services' programs, the Secretary of Defense should direct the Under Secretary of Defense for Acquisition, Technology, and Logistics, in coordination with the Chairman of the Joint Chiefs of Staff, to revise DOD's strategic policy or include in other department-wide guidance specific interim goals for achieving that vision and desired end state.

Agency: Department of DefenseStatus: Open

Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.

Recommendation: The Secretary of Defense should direct the Secretary of the Navy to revise the Navy's ship delivery policy to clarify what types of deficiencies need to be corrected and what mission capability (including the levels of quality and capability) must be achieved at (1) delivery and (2) when the ship is provided to the fleet (at the obligation work limiting date (OWLD)). In doing so, the Navy should clearly define what constitutes a complete ship and when that should be achieved.

Agency: Department of DefenseStatus: Open

Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.

Recommendation: The Secretary of Defense should direct the Secretary of the Navy to reconcile policy with practice to support INSURV's role in making a recommendation for fleet introduction. Accomplishing this may require a study of the current timing of ship trials, and the costs and benefits associated with adding an INSURV assessment prior to providing ships to the fleet.

Agency: Department of DefenseStatus: Open

Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.

Recommendation: The Secretary of Defense should direct the Secretary of the Navy to reflect additional ship milestones in Selected Acquisition Reports to Congress, including OWLD and readiness to deploy.

Agency: Department of DefenseStatus: Open

Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.

Recommendation: The Secretary of Defense should direct the Secretary of the Navy to, in Selected Acquisition Reports to Congress, ensure that the criteria used to declare IOC aligns with DOD guidance, and reflect the definition of this milestone in the reports.

Agency: Department of DefenseStatus: Open

Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.

Recommendation: To ensure the Milestone Decision Authority has an accurate and credible cost estimate for the Milestone C program review, Naval Sea Systems Command Cost Engineering and Industrial Analysis Group (NAVSEA 05C) should update the cost estimate for CVN 79 as part of the Ford-Class program life-cycle cost estimate. This estimate should be prepared in accordance with cost estimating best practices and include current shipbuilder performance data. The Naval Center for Cost Analysis (NCCA) should review the new CVN 79 cost estimate as part of the planned independent cost assessment. Further, the Secretary of Defense should direct the CAPE to include the new CVN 79 cost estimate as part of the planned independent cost estimate, which should form the basis of the program budget request. If the independent cost estimate for CVN 79 should exceed the cost cap, the Navy should submit to Congress a request to revise the cost cap.

Agency: Department of DefenseStatus: Open

Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.

Recommendation: Starting with CVN 80, NAVSEA 05C should develop program life-cycle cost estimates for each individual ship in the Ford-Class program baseline. Development of these estimates should be provided at milestone reviews that should be aligned with major aircraft carrier funding events. In particular, for CVN 80, a program life-cycle cost estimate should be developed prior to the request for ship construction funding. For all ships in the class after CVN 80, a program life-cycle cost estimate should be aligned with milestone reviews that correspond with the receipt of any advance procurement funding and the first year of the request for ship construction funding. These estimates should be prepared in accordance with best practices and updated regularly with actual cost data. The Secretary of Defense should further direct the Office of Cost Assessment and Program Evaluation to develop independent cost estimates for these ships prior to the listed events. The Secretary of the Navy should direct NCCA to conduct independent cost assessments for these ships prior to the listed events.

Agency: Department of DefenseStatus: Open

Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.

Recommendation: To improve insight into cost changes for individual ships in the Ford Class, the program office should prepare cost summary and funding summary sections for each individual ship in the class as part of the SAR for the overall Ford-Class program.

Agency: Department of DefenseStatus: Open

Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.

Recommendation: To ensure that the Navy's manpower requirements are current and analytically based and will meet the needs of the existing and future surface fleet, the Under Secretary of Defense for Personnel and Readiness should direct the Secretary of the Navy to have the Navy conduct a comprehensive reassessment of the Navy standard workweek and make any necessary adjustments.

Agency: Department of Defense: Office of the Under Secretary for Personnel and ReadinessStatus: Open

Comments: DOD concurred with our recommendation, citing its commitment to ensuring that the Navy's manpower requirements are current and analytically based and will meet the needs of the existing and future surface fleet.

Recommendation: To ensure that the Navy's manpower requirements are current and analytically based and will meet the needs of the existing and future surface fleet, the Under Secretary of Defense for Personnel and Readiness should direct the Secretary of the Navy to have the Navy update guidance to require examination of in-port workload and identify the manpower necessary to execute in-port workload for all surface ship classes.

Agency: Department of Defense: Office of the Under Secretary for Personnel and ReadinessStatus: Open

Comments: DOD concurred with our recommendation, citing its commitment to ensuring that the Navy's manpower requirements are current and analytically based and will meet the needs of the existing and future surface fleet.

Recommendation: To ensure that the Navy's manpower requirements are current and analytically based and will meet the needs of the existing and future surface fleet, the Under Secretary of Defense for Personnel and Readiness should direct the Secretary of the Navy to have the Navy develop criteria and update guidance for reassessing the factors used to calculate manpower requirements periodically or when conditions change.

Agency: Department of Defense: Office of the Under Secretary for Personnel and ReadinessStatus: Open

Comments: DOD concurred with our recommendation, citing its commitment to ensuring that the Navy's manpower requirements are current and analytically based and will meet the needs of the existing and future surface fleet.

Recommendation: To ensure that the Navy's manpower requirements are current and analytically based and will meet the needs of the existing and future surface fleet, the Under Secretary of Defense for Personnel and Readiness should direct the Secretary of the Navy to have the Navy identify personnel needs and costs associated with the planned larger Navy fleet size, including consideration of the updated manpower factors and requirements.

Agency: Department of Defense: Office of the Under Secretary for Personnel and ReadinessStatus: Open

Comments: DOD concurred with our recommendation, citing its commitment to ensuring that the Navy's manpower requirements are current and analytically based and will meet the needs of the existing and future surface fleet.

Recommendation: To help ensure the Navy thoroughly considers the relative benefits of using FPI contracts for shipbuilding versus other contract types, the Secretary of Defense should direct the Secretary of the Navy to conduct a portfolio-wide assessment of the Navy's use of additional incentives on FPI contracts across its shipbuilding programs. This assessment should include a mechanism to share proven incentive strategies for achieving intended cost, schedule, and quality outcomes among contracting and program office officials.

Agency: Department of Defense: Department of the NavyStatus: Open

Comments: In providing comments on this report, the agency concurred with this recommendation but has not yet taken any actions necessary to implement it.

Recommendation: To ensure that DOD's biennial core reporting procedures align with the reporting requirements in Section 2464 and each reporting agency provides accurate and complete information, the Secretary of Defense should direct the Under Secretary of Defense for Acquisition, Technology and Logistics to update DOD's guidance--in particular DOD Instruction 4151.20--to require future Biennial Core Reports to include instructions to the reporting agencies on how to (1) report additional depot workload performed that has not been identified as a core requirement, (2) accurately capture inter-service workload, (3) calculate shortfalls, and (4) estimate the cost of planned workload.

Agency: Department of DefenseStatus: Open

Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.

Recommendation: To increase the transparency of future Biennial Core Reports, Congress should consider amending 10 USC 2464 to require DOD to include information such as (1) workload shortfalls at lower-level categories; (2) executed workload in similar categories that could be used to mitigate shortfalls; (3) progress on implementing mitigation plans; (4) data reported at the first-level category of the work breakdown structure, except for when shortfalls are identified; (5) explanations for first-level categories (i.e., Special Interest Items and Other) of the work breakdown structure; and (6) whether the core requirements reported in the previous Biennial Core Report have been executed.

Agency: CongressStatus: Open

Comments: When we determine what steps the Congress has taken, we will provide updated information.

Recommendation: In order to promote effective implementation of the MAC-MO contracting strategy, the Secretary of Defense should direct the Secretary of the Navy to complete the following action: Assign responsibility to a single entity comprised of representatives from the fleet and shore-based maintenance communities, such as Surface Team 1, to perform systematic assessments of MAC-MO's implementation that include the following: (1) Review of lessons learned and identification of changes to Navy processes, including staffing, needed to support the MAC-MO strategy, (2) Evaluation of performance against anticipated cost, schedule, and quality objectives, as outlined in the MAC-MO acquisition strategy, and (3) Input and recommendations from all Navy parties that participate in the scheduling, planning, budgeting, oversight, and policy development for the repair, maintenance, and modernization of non-nuclear surface ships.

Agency: Department of DefenseStatus: Open

Comments: In providing comments on this report, the agency concurred with this recommendation. Navy has since responded that it is in the process of preparing its first biennial report on its assessment of the MAC-MO contracting strategy and this report will address the elements of our recommendation. This first report is due by December 31, 2017. As of early August 2017, the Navy has completed its review of the completed availabilities under the MAC-MO contract and analyzed data.

Recommendation: To ensure that the department can implement readiness rebuilding efforts, the Secretary of Defense should direct the Secretaries of the Departments of the Army, the Navy, and the Air Force to establish comprehensive readiness rebuilding goals to guide readiness rebuilding efforts and a strategy for implementing identified goals, to include resources needed to implement the strategy.

Agency: Department of DefenseStatus: OpenPriority recommendation

Comments: The military services have taken steps to establish both comprehensive goals to guide readiness rebuilding efforts and a strategy for implementing identified goals, to include the resources needed to implement the strategy. The military services have defined their readiness rebuilding goals and, in some cases, extended these goals since we reported in 2016. Further, through the department's Readiness Recovery Framework that is currently under development, the military services have identified key readiness issues that their respective forces face and actions to address these issues, as well as metrics by which to assess progress toward achieving overall readiness recovery goals. For the Fiscal Year 2017 Request for Additional Appropriations and the Fiscal Year 2018 Budget Request, the military services identified resources needed to improve readiness and achieve overall readiness recovery goals. Moreover, the Office of the Secretary of Defense continues to work with the military services to ensure that the services' actions and metrics clearly align with readiness recovery goals in an executable strategy.

Recommendation: To ensure that the department can implement readiness rebuilding efforts, the Secretary of Defense should direct the Secretaries of the Departments of the Army, the Navy, and the Air Force to develop metrics for measuring interim progress at specific milestones against identified goals for all services.

Agency: Department of DefenseStatus: OpenPriority recommendation

Comments: The military services have taken steps to develop metrics for measuring interim progress at specific milestones against identified readiness recovery goals. Through the Readiness Recovery Framework process under development, the military services have identified key readiness issues that their respective forces face and actions to address these issues, as well as metrics to assess progress toward readiness recovery goals that include quantifiable deliverables at specific milestones. The Office of the Secretary of Defense continues to work with the military services to ensure that the services' metrics and milestones clearly align with readiness recovery goals.

Recommendation: To ensure that the department can implement readiness rebuilding efforts, the Secretary of Defense should direct the Secretaries of the Departments of the Army, the Navy, and the Air Force to identify external factors that may impact readiness recovery plans, including how they influence the underlying assumptions, to ensure that readiness rebuilding goals are achievable within established time frames. This should include, but not be limited to, an evaluation of the impact of assumptions about budget, maintenance time frames, and training that underpin the services' readiness recovery plans.

Agency: Department of DefenseStatus: OpenPriority recommendation

Comments: To ensure that the department can implement readiness rebuilding efforts, the Secretary of Defense should direct the Secretaries of the Departments of the Army, the Navy, and the Air Force to identify external factors that may impact readiness recovery plans, including how they influence the underlying assumptions, to ensure that readiness rebuilding goals are achievable within established time frames. This should include, but not be limited to, an evaluation of the impact of assumptions about budget, maintenance time frames, and training that underpin the services' readiness recovery plans.

Recommendation: To ensure that the department has adequate oversight of service readiness rebuilding efforts and that these efforts reflect the department's priorities, the Secretary of Defense should validate the service-established readiness rebuilding goals, strategies for achieving the goals, and metrics for measuring progress, and revise as appropriate.

Agency: Department of DefenseStatus: OpenPriority recommendation

Comments: The Office of the Secretary of Defense (OSD) has taken steps to validate the service-established readiness rebuilding goals, strategies for achieving the goals, and metrics for measuring progress through the Readiness Recovery Framework. OSD officials have developed a common framework and template for each of the military services by which to evaluate their goals, strategies, metrics, and milestones. OSD is in the process of meeting with each of the military services to refine and validate their readiness rebuilding plans, with the aim of including them as well as assessments of progress and mitigation plans in either the third or fourth-quarter fiscal year 2018 Quarterly Readiness Report to Congress.

Recommendation: To ensure that the department has adequate oversight of service readiness rebuilding efforts and that these efforts reflect the department's priorities, the Secretary of Defense should develop a method to evaluate the department's readiness recovery efforts against the agreed-upon goals through objective measurement and systematic analysis.

Agency: Department of DefenseStatus: OpenPriority recommendation

Comments: The Office of the Secretary of Defense (OSD) has taken steps to develop a Readiness Recovery Framework, with which OSD officials can evaluate the department's readiness recovery efforts against the agreed-upon goals through objective measurement and systematic analysis. OSD has established a timeline and oversight process to validate, monitor, and evaluate the military services' readiness recovery efforts and report progress against goals biannually in the Quarterly Readiness Report to Congress. OSD has also drafted a memorandum to guide the military services in their readiness recovery efforts and aims to issue further guidance that institutionalizes the Readiness Recovery Framework process after further developing and refining it.

Recommendation: To ensure a more accurate estimate of the expected cost savings under the fiscal year 2013-2017 multiyear procurement, Congress should consider requiring the Navy to update its estimate of savings, which currently reflects only Flight IIA ships, to increase transparency for costs and savings for Congress and the taxpayers, as well as provide improved information to support future multiyear procurement savings estimates.

Agency: CongressStatus: Open

Comments: To ensure a more accurate estimate of the expected cost savings under the fiscal year 2013-2017 multiyear procurement, we asked Congress to consider requiring the Navy to update its estimate of savings, which currently reflects only Flight IIA ships, to increase transparency for costs and savings for Congress and the taxpayers, as well as provide improved information to support future multi-year procurement savings estimates. Neither the Senate nor House National Defense Authorization Act (NDAA) reports for fiscal year 2018 direct the Navy to update its savings and both reports include language authorizing the Navy to pursue a DDG 51 Flight III multi-year procurement contract for fiscal years 2018-2022. We will continue to monitor the status of this matter at least until the NDAA for fiscal year 2018 is enacted, at which time we will close the matter as not implemented if the multi-year procurement is authorized and no savings update requirement is included.

Recommendation: To better support DDG 51 Flight III oversight, the Secretary of Defense should designate the Flight III configuration as a major subprogram of the DDG 51 program in order to increase the transparency, via Selected Acquisition Reports, of Flight III cost, schedule, and performance baselines within the broader context of the DDG 51 program.

Agency: Department of DefenseStatus: Open

Comments: DOD agreed that visibility into DDG 51 Flight III cost, schedule, and performance is important for oversight, but does not plan to designate Flight III as a major subprogram. No further DOD action has been taken on this recommendation and congressional reports supporting the National Defense Authorization Act for Fiscal Year 2018--yet to be finalized and enacted--do not include any direction for the department to do so. Nevertheless, with construction of the lead Flight III ship only recently awarded (June 2017), we will continue to monitor any action taken to designate Flight III as a major subprogram.

Recommendation: The Secretary of Defense should, before the downselect decision for the frigates, require the program to submit appropriate milestone documentation as identified by OSD, which could include an Independent Cost Estimate, an Acquisition Program Baseline, and a plan to incorporate the frigate into SAR updates.

Agency: Department of DefenseStatus: Open

Comments: DOD partially concurred with this recommendation, noting that the Navy views the LCS transition to the frigate as an incremental upgrade as opposed to a new acquisition program. DOD also stated that the Navy would be required to provide key documentation related to the seaframe, including an independent cost estimate and an updated acquisition program baseline. In 2017, the Navy decided to pursue a different frigate acquisition strategy, and according to the program office, the frigate is now considered a new, distinct acquisition program and will have milestone decisions and require the applicable milestone documentation and OSD oversight and reporting as the program moves toward an award decision in fiscal year 2020. The program office also noted that the specific milestone documentation that will be required is currently being assessed and the program plans to have a frigate Selected Acquisition Report. Once more details are finalized for the program, the planned actions would meet the intention of our recommendation. We will keep this recommendation open until the program's approach has been better defined.

Recommendation: To help provide better visibility of DOD's financial management status for decision makers and to improve oversight of DOD's audit readiness efforts to strengthen internal controls and improve financial practices and processes, the Under Secretary of Defense (Comptroller) should, while developing other formatting changes to be made in future reports, expand the semiannual FIAR Plan Status Report to include the extent to which assertions of audit readiness have been made without assurance that related controls are effective and the details of remediation activities taken and planned to correct the known internal control deficiencies.

Agency: Department of Defense: Under Secretary of Defense (Comptroller)Status: Open

Comments: DOD concurred with this recommendation and stated that its future FIAR Plan Status Reports will provide an increased level of detail regarding critical aspects of achieving audit readiness. DOD further stated that it would use the recommendation to develop and, where appropriate, enhance future semiannual Status Reports to include greater visibility into the progress and impediments related to PP&E audit readiness. Specifically, DOD stated that the Office of the Under Secretary of Defense (Comptroller) will work with the military departments to ensure that their audit readiness plans include specific milestones for addressing internal control deficiencies. The Comptroller expects completion by the November 2017 FIAR report. We will continue to evaluate DOD's actions to address this recommendation.

Recommendation: To help provide better visibility of DOD's financial management status for decision makers and to improve oversight of DOD's audit readiness efforts to strengthen internal controls and improve financial practices and processes, the Under Secretary of Defense (Comptroller) should, while developing other formatting changes to be made in future reports, expand the semiannual FIAR Plan Status Report to include the details of military services' actions taken and progress made toward correcting the control deficiencies underlying the reported dealbreakers.

Agency: Department of Defense: Under Secretary of Defense (Comptroller)Status: Open

Comments: DOD concurred with this recommendation and stated that its future FIAR Plan Status Reports will provide an increased level of detail regarding critical aspects of achieving audit readiness. DOD further stated that it would use the recommendation to develop and, where appropriate, enhance future semiannual Status Reports to include greater visibility into the progress and impediments related to PP&E audit readiness. Specifically, DOD stated that the Office of the Under Secretary of Defense (Comptroller) will work with the military departments to ensure that their audit readiness plans include specific milestones for addressing internal control deficiencies. The Comptroller expects completion by the November 2017 FIAR report. We will continue to evaluate DOD's actions to address this recommendation.

Recommendation: To improve the use of warranties and guarantees in Navy shipbuilding, the Secretary of the Defense should direct the Secretary of the Navy, in arrangements where the shipbuilder is paid to correct defects, to structure contract terms such that shipbuilders do not earn profit for correcting construction deficiencies following delivery that are determined to be their responsibility.

Agency: Department of DefenseStatus: Open

Comments: In providing comments on this report, the Department of Defense partially concurred with this recommendation, and has completed a study reviewing our findings. The study, conducted by the CNA Analysis and Solutions, found that our recommendations were well founded and appropriate. In response to our report and the study, the Navy states it will provide written guidance by the end of 2017 to prevent shipbuilders from earning profit for correcting shipbuilder-responsible defects.

Recommendation: To improve the use of warranties and guarantees in Navy shipbuilding, the Secretary of the Defense should direct the Secretary of the Navy to establish and document a clear objective for using a guaranty, and then create guidance for contracting officers that illustrates how to implement a guaranty that meets this objective. This guidance should describe how contracting officers should use aspects of the guaranty, including determining an appropriate limitation of liability, to achieve the objective and include considerations as to when a guaranty should be a separate contract line item.

Agency: Department of DefenseStatus: Open

Comments: In providing comments on this report, the Department of Defense partially concurred with this recommendation, and agreed to conduct a study to determine what policy and guidance changes are necessary to provide guidance on the many factors that should be considered to effectively implement warranty and guaranty provisions. As of April 2017, this study is complete and the Navy states that it now concurs with our recommendation. In doing so, the Navy is drafting an instruction, including a decision template, laying out the considerations underlying the decision to use warranties, guarantees or other mechanisms. This instruction will help contracting officers choose an appropriate tool and document the decision in a business clearance memorandum. The Navy plans to implement the instruction by the end of 2017.

Recommendation: To improve the use of warranties and guarantees in Navy shipbuilding, the Secretary of the Defense should direct the Secretary of the Navy, for future ship construction contracts, to determine whether or not a warranty as provided in the FAR, provides value and document the costs, benefits, and other factors used to make this decision. To inform this determination, the Navy should begin differentiating the government's and shipbuilder's responsibility for defects and track the costs to correct all defects after ship delivery.

Agency: Department of DefenseStatus: Open

Comments: In providing comments on this report, the Department of Defense partially concurred with this recommendation, and has completed a study reviewing our findings. The study, conducted by the CNA Analysis and Solutions, found that our recommendations were well founded and appropriate. In response to our report and the study, the Navy states it will include separate contract line items for FAR-type warranties in at least two solicitations for ship construction. In addition, the Navy states that it plans to revise data requirements to better gather and track contractor responsible defects, and then develop analytical methods to help make better determinations in the future as to the optimal guaranty duration and limit of liability. They expect to complete these activities by December 2017.

Recommendation: To balance combatant commanders' demands for forward presence with the Navy's needs to sustain a ready force over the long term and identify and mitigate risks consistent with Federal Standards for Internal Control, the Secretary of Defense should direct the Secretary of the Navy to develop a comprehensive assessment of the long-term costs and risks to the Navy's surface and amphibious fleet associated with its increasing reliance on overseas homeporting to meet presence requirements, make any necessary adjustments to its overseas presence based on this assessment, and reassess these risks when making future overseas homeporting decisions and developing future strategic laydown plans.

Agency: Department of DefenseStatus: Open

Comments: As of August 2017, the Navy had not completed their assessment.

Recommendation: To help ensure that DOD's future submissions of the Biennial Core Report will be more accurate and complete, the Secretary of Defense should direct the Assistant Secretary of Defense for Logistics and Materiel Readiness to assess the review processes and implement needed improvements.

Agency: Department of DefenseStatus: Open

Comments: As of August 10, 2015, the Assistant Secretary of Defense Logistics and Materiel Readiness stated that the process for developing and issuing DOD's Biennial Core Report has been reviewed and two corrective actions have been identified. First, a tasking memorandum for the military service to submit their input for the DOD Core Capability Report will be issued in October instead of December. This tasking will also require each submitting military service to include a certification by a General/Flag Officer or Senior Executive Service member that their military service's data is complete and accurate. Second, the extra time will allow Office of Secretary of Defense staff to conduct a more thorough review of the military service's submitted data to verify completeness and accuracy. These actions will not be complete until April 2016 which is when DOD will submit its next Core Capability Report. As of July 2016, DOD made the two corrective actions above. However, the 2016 DOD Biennial Core Report still contained data errors and inaccurate information, therefore these process improvements did not make the report more complete and accurate.

Recommendation: To improve the quality of the Navy's future decommissioning decisions, the Secretary of Defense should direct the Secretary of the Navy to direct the Chief of Naval Operations to document the Navy's early decommissioning in decision memorandums in accordance with the General Policy for the Inactivation, Retirement, and Disposition of U.S. Naval Vessels prior to approving any future recommendations for early decommissioning of Navy ships.

Agency: Department of DefenseStatus: Open

Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.

Recommendation: To enhance the likelihood that those decisions will be implemented, the Secretary of Defense should direct the Secretary of the Navy to direct the Chief of Naval Operations to update the Navy's General Policy for the Inactivation, Retirement, and Disposition of U.S. Naval Vessels to incorporate key elements of federal standards for internal control, such as communicating with and obtaining information from external stakeholders, comparing actual performance to planned or expected results, evaluating performance measures and indicators, such as risk, and comparing and assessing different sets of data to establish relationships and take appropriate action. In updating the policy, the Chief of Naval Operations should also consider requiring that its early decommissioning decision memorandums specifically address capacity as well as capability gaps.

Agency: Department of DefenseStatus: Open

Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.

Recommendation: To help ensure that it receives accurate information on the full effect of funding decisions on acquisition programs, Congress should consider amending the law that governs the 5-year Capital Investment Plan to require the Coast Guard to submit cost and schedule information that reflects the impact of the annual President's budget request on each acquisition across the portfolio--in addition to the current practice of reporting the cost and schedule estimates in current program baselines.

Agency: CongressStatus: Open

Comments: Thus far no congressional action has been taken on this Matter. We will continue to follow up with relevant congressional committees.

Recommendation: To help the Coast Guard improve the long-term outlook of its portfolio, the Commandant of the Coast Guard should develop a 20-year fleet modernization plan that identifies all acquisitions needed to maintain the current level of service and the fiscal resources necessary to build the identified assets. The plan should also consider trade-offs if the fiscal resources needed to execute the plan are not consistent with annual budgets.

Agency: Department of Homeland Security: United States Coast GuardStatus: Open

Comments: Based on this recommendation, Congress has requested that the Coast Guard develop a 20-year plan that identifies all acquisitions needed to maintain the Coast Guard's current level of service and the financial commitment necessary to achieve this plan. As a part of a series of testimonies in June and July 2017, we found that Coast Guard officials stated they are developing a 20-year Capital Investment Plan (CIP), but the timeframe for completion is unknown. The Coast Guard does, however, submit a 5-year CIP annually to Congress that projects acquisition funding needs for the upcoming 5 years. GAO found the CIPs do not match budget realities in that tradeoffs are not included. In the 20-year CIP, GAO would expect to see all acquisitions needed to maintain current service levels and the fiscal resources to build the identified assets as well as tradeoffs in light of funding constraints.

Recommendation: To ensure Ford-class carrier acquisitions are supported by sound requirements and a comprehensive testing strategy, and to promote the introduction of reliable, warfighting capable ships into the fleet, the Secretary of Defense should direct the Secretary of the Navy to take the following action prior to accepting delivery of CVN 78. The Secretary of Defense should direct the Secretary of the Navy to adjust the planned post-delivery test schedule to ensure that system integration testing is completed prior to entering initial operational test and evaluation.

Agency: Department of DefenseStatus: OpenPriority recommendation

Comments: Until the Navy updates the test plan in June 2018, we will not know if it will fully address our recommendation. However, recent test schedules suggest an overlap remains between integration testing and the start of initial operational test and evaluation.

Recommendation: To ensure that Congress has visibility over the status of DOD's core depot-level maintenance and repair capability, the Secretary of Defense should direct the Deputy Assistant Secretary of Defense (Maintenance, Policy, and Programs) to include in the Biennial Core Report to Congress detailed explanations for why services do not have the workload to meet core maintenance requirements for each shortfall identified in the report.

Agency: Department of DefenseStatus: Open

Comments: As of July 2016, recent GAO work on this issue shows that DOD has not fully implemented this recommendation. In DOD's 2016 Biennial Core Report, DOD did not provide detailed explanations for all of the services shortfalls identified in its report. We are waiting until DOD's 2018 Biennial Core Report to further update the status of this recommendation.

Recommendation: The Secretary of Defense should direct the Secretary of the Navy to report to Congress in its annual long-range shipbuilding plan on its plans for a future, larger surface combatant, carrying a more capable version of AMDR and the costs and quantities of this ship.

Agency: Department of DefenseStatus: Open

Comments: As in past years, the Congressional Budget Office completed an analysis of the Navy's Fiscal Year 2017 Shipbuilding Plan. The most recent analysis states that the Navy's Long Range Shipbuilding Plan for Fiscal Year 2017 indicates plans to procure 26 DDG 51 Flight III destroyers but provides little specific information regarding a future large surface combatant ship other than noting plans to begin buying the first of 40 ships in 2030 and an estimated cost of $1.9 billion per ship. This lack of detailed information is consistent with past plans. We will keep this recommendation open and will review the Navy's Fiscal Year 2018 plan to determine if greater detail on a future large surface combatant has been developed as a result of changes in the Navy's shipbuilding outlook currently under discussion.